This week, Trans-Orient announced that Johnson had taken the helm at the company after the resignation of former chief executive Peter Loretto, who will remain a company director.

Johnson became TAG CEO late last year and Trans-Orient president in January. He will continue to hold both posts.

In addition, Trans-Orient's former business development vice-president Drew Cadenhead, who was TAG Oil's New Zealand-based chief executive until resigning late last year, is now Trans-Orient's North American-based chief operating officer.

"There are increasingly common links between the two companies, with various executives and directors being on both boards and the primary focus of both companies being onshore New Zealand," one source told PetroleumNews.net. "I would not be surprised to see a merger."

Trans-Orient executive chairman Dave Bennett, who is also a TAG director, denied any present merger plans.

"There are no formal discussions about the merger of the companies right now," he told PNN.

But a second source said shareholders in the two firms may see greater efficiencies in merging the firms and not having two separate management structures and associated operating costs.

"I believe it's only a matter of time before shareholders seek synergies from operating the two as one," he told PNN.

Canadian businessman Alex Guidi founded Trans-Orient, TAG and another New Zealand explorer, Austral Pacific Energy, and holds significant stakes in Trans-Orient and TAG, as well as being a Trans-Orient director.

Trans-Orient holds about 10% in Austral Pacific, which is also Canadian-incorporated.

There has been previous speculation about possible mergers between Trans-Orient, TAG and Austral.